Industrial Technologies. Amsterdam, June 2016 Nitan Pathak European Investment Fund

Transcription

1 Industrial Technologies Amsterdam, June 2016 Nitan Pathak European Investment Fund 1

2 What is the EIF? We provide risk financing to stimulate entrepreneurship and innovation in Europe Making finance more accessible and helping SMEs to innovate and grow Offering a large array of targeted products to support SMES ranging from venture capital to guarantees and microfinance to SMEs Working with financial intermediaries across the EU-28 EFTA countries, candidate & potential candidate countries Supporting the market in a countercyclical way 2

3 Small and Medium-sized Enterprises (SMEs) key facts SMEs are major contributors to economic growth and job creation in Europe 99% 20 million EUR 3.4 trl 1 in 3 SMEs of businesses in Europe are SMEs SMEs in Europe totalling 86 million jobs which equal 66.5% of all European jobs of SME contribution to the GDP* of the EU-28 failed to obtain the financing they needed in This is where EIF steps in. *source: Annual Report on European SMEs 2012/ European Commission 2012 figure 3

4 EIF shareholders A unique public-private shareholding 61.2% FIs 12.3% 26.5% 4

5 EIF mandate stakeholders Mandators, Intermediaries, Recipients and EIF EIF works with a wide range of counterparts to support SMEs Mandators/ Resources European Investment Bank EIF own resources European Commission Member States/regions Managing Authorities Corporates/private Public institutions Other third parties Intermediaries and counterparts Fund Managers Commercial Banks Development & Promotional Banks Guarantee Institutions Leasing Companies Corporates Business Angels Microfinance Institutions microenterprises, SMEs and small mid-caps 5

6 EIF intervention model Two main activities EIF engages in two very distinct activities in support of SMEs, using both its own-risk and mandate resources Issuing guarantees and credit enhancements to financial intermediaries in order to support lending, leasing, and other debt financings for SMEs: EIF issues guarantees for mandate transactions, own-risk and/or blended; EUR25.000,00 EUR20.000,00 EIB and EU mandate aggregate volume Debt Equity Guarantees issued under mandates are funded by cash paid in by the mandator and are not part of EIF s balance sheet EUR15.000,00 Investing in private equity funds oriented towards providing equity to SMEs: EUR10.000,00 EIF does not - as a general practice - invest in individual companies Private sector investors must provide a substantial part of the capital, depending on the mandate (as a general rule, at least 50% of an equity fund s capital); EIF is highly flexible and innovative engaging in these activities EUR5.000,00 EUR- 6

7 EIF - EU mandate overview Helping businesses at every stage Guarantees & Debt Programmes Equity Programmes COSME Equity Facility for Growth Public Stocks EIB InnovFin products** InnovFin SME Guarantee SME Initiative COSME Loan Guarantee Facility Cultural and Creative Sector Guarantee Facility* InnovFin SME Venture Capital* InnovFin Tech Transfer* EaSI (Employment & Social Innovation) * Not yet signed ** InnovFin MidCap Guarantee InnovFin MidCap Growth Finance InnovFin Large Projects PRE-SEED PHASE SEED PHASE START-UP PHASE EMERGING GROWTH DEVELOPMENT SME Development Stages HIGHER RISK LOWER RISK 7

8 Strategic Challenges EIF Current Investment Focus Equity: Involved Throughout The Lifecycle of the Enterprise Technology Transfer Accelerator Investing in VC funds Investing in Growth Capital Mezzanine Technology Transfer Proof of Concept Business Angels Seed Stage Early Stage Business Angels Expansion/ Development Capital Lower Mid-Market Provide instruments to stimulate innovation, competitiveness and entrepreneurship Fill funding gap left by institutional investors Support VC ecosystem and decrease dependency on public finance Business development Catalyse hybrid debt finance for growth European Commission Resources EIB / EIF Resources Member States / Private Sector Resources 8

9 EIF s VC Fund-of-Funds Activity Europe s largest and most influential investor in European Venture Capital Invested in 300+ Venture Capital funds Portfolio companies More than 170+ VC fund manager relationships 99% visibility on European venture market 19 years on European VC market 4.8bn Outstanding Equity Investments in European Venture Capital funds Backing first time funds managed by tomorrow s top quartile teams First mover in Europe s emerging markets and technology sectors 9

10 European VC Ecosystem is Maturing Preferred career path Attracts high potentials / managers Next generation of founders Talent Experience 1st generation founders as mentors Execution infrastructure ready Excellence building blocks available Successful exits via M&A and IPOs Entrepreneurs reinvest in the ecosystem Powerful role models for young talent Source: Holtzbrinck Ventures Exits Thinking Big Strong teams are ambitious Looking beyond building small Focus: big international opportunity Capital Former entrepreneurs invest Business angels are everywhere Every good idea gets funded 10

11 Technology Talent Source: Real Deals 11

12 European $100m+ exits in 2014 M&A IPO 12

13 European $100m+ exits continuing in 2015 M&A IPO 13

14 European $100m+ exits continuing in 2016 M&A IPO 14

15 Europe is leading the way in many areas Music: Games: E-commerce: Software: Finance: 15

16 European VC eco-system is vibrant and mature Accelerators and incubators: Events: Serial entrepreneurs: Top US VCs are also in Europe: Corporates: Public Policy: 16

17 Successful entrepreneurs becoming VC investors Niklas Zennstrom Marc Simoncini Brent Hoberman Ben and Josh White Mans Hultman And many others 17

18 European Unicorns t-3 Source: Holtzbrinck Ventures 18

19 European Unicorns European tech companies reaching surpassing ~USD ~USD 1bn valuations 1bn valuations Source: Holtzbrinck Ventures, EIF 19

20 The rise & fall of the unicorns Dropbox -20% Snapchat -25% Square -20% - -40% Zenefits -50% MongoDB -50% But not all is bad: Uber, The Honest Co., AirBnB, SpaceX, etc. Source: Fortune (re. Fidelity), Economist, Sunstone, EIF 20

21 It s going North! Performance Index - Rebased to 100 on LMM Funds VC Funds

22 EIF s VC portfolio (1/2) Double digit net fund IRRs for vintages 2007 and beyond Top 10: 33% - 66% Median = 46% Top 20: 23% - 66% Median = 32% Top 30: 16% - 66% Median = 27% 22

23 EIF s VC portfolio (2/2) European VC investing can be done profitably Attractive single and double digit net IRRs on some of our VC FoFs mandates Provisioning for carried interest on some of them VC model broken? Distributions/capital calls ratio in 2014 & 2015 in EIF portfolio above 1 (corrected for drastically increased commitment volumes over the last years) Increasing appetite for European VC funds + oversubscribed funds 23

24 Find your financial intermediary here! 24

25 Contact Nitan Pathak Institutional Business Development European Investment Fund 37B avenue J.F. Kennedy L-2968 Luxembourg 25